Reacting to Carvana Co.'s (NYSE:CVNA) earnings release, Deutsche Bank analysts said the company's results were "very strong" even compared to its pre-announcement at the beginning of June.
Carvana "continues to right-size operations to bridge toward sustainably positive Ebitda," the analysts said in a note Wednesday. They maintained a Hold rating and $11 price target on the stock.
Carvana shares are currently up more than 37% following its earnings beat and news of a deal to restructure its debt.
"In the quarter, retail units delivered was just 76.5k units (-35% YoY), in line with our forecast of 76.4k units and on par with in-going commentary for sequentially lower sales compared to 1Q, falling about 3% MoM," the analysts added. "This can be attributed to higher interest rates, lower inventory levels, and the company's own internal effort to reduce cost (such as reduced ad spend)."
"Carvana reported sales of $2,968m (-24% YoY), a touch above our $2,505m, reflecting the drop in volume YoY. Meanwhile, total non-GAAP GPU accelerated rapidly to $7,030 (representing a company quarterly record), even above the pre-announced $6k+, with retail unit GPU up 186% YoY to $2,862 (from $1,309 last year)."